At Phoenix Mortgage Specialists, Inc., we champion every individual willing to step over the threshold into home ownership. We soberly recognize that for many, home ownership is an incredibly exciting and yet daunting step. Home ownership may seem like a financial commitment far too insurmountable, but this is where our decades of experience can help individuals like you navigate through buying a home affordably. We are proud to connect prospective home owners with FHA loans that allow their dreams to become a reality.
Due, in part, to the implementation of FHA loans over 70 years ago, homeownership has become an increasing reality for millions of Americans. FHA loans are mortgages ideally suited for low-to-upper middle income borrowers. They are mediated and supported by the Federal Housing Administration and issued to borrowers through federally qualified lenders. This is what uniquely sets FHA loans apart from other loans, and this is what sets up FHA loans to benefit both lender and borrower.
One of the keys to the FHA loan system is that if a homeowner fails to pay on his or her FHA mortgage and defaults on his or her loan, the federal government intervenes to preserve the stability of the market by reimbursing the bank or lender of this mortgage. This is what makes it a government-supported loan, and this is also what makes it a loan that is easier and more advantageous to lend. Banks and lenders more readily issue FHA loans in light of guaranteed federal support, and consequently, this security eventually benefits the homeowner.
FHA loans are known to require small down payments (minimum of 3.5% which can be gifted by a family member) relative to other loans. This makes it a very accommodating route for many low-to-upper middle income homeowners. Please note FHA loans are only for homes of primary residence occupancy. Additionally, a FHA loan is also different than other loans in that borrowers who recently experienced bankruptcy or foreclosure likely have a better chance being approved for the loan. Furthermore, though it is in flux, the qualifications also tend to be more lenient relative to other loans. This can depend upon the lender.
These are a few fundamental elements taken into consideration when lenders approve a loan:
DTI (Debt-To-Income) Ratio: This is definitely a large factor. DTI is the ratio between projected monthly payments and monthly income. If that gap is not large enough, it can disqualify a prospective borrower. In other words, if their income is not large enough in comparison to the mortgage plus the borrower’s current debts (credit cards, student loans, car loans, etc.), then, it can make the prospective homeowner ineligible to receive the loan.
Credit Score: This is also a key factor. Lenders tend to accept minimally a middle credit score of 500. However, a lower score does not necessarily exclude someone entirely from the loan; it just necessitates a larger down payment in exchange.
Steady employment:Continuous work for the same employer for at least 2 years is essential. There are no objective income limits. It is relative to the loan. However, if you have any specific inquiries about qualifications beyond this point, contact us. We would be glad to work with you to obtain the information you need for all your loan qualification-related concerns.
Another important thing to note is the kinds of FHA loans offered. Here are a few:
FHA Fixed Rate Mortgage 203(b): This is the most popular type of FHA loan. It is attractive for many to have a fixed, predictable interest rate.
FHA Adjustable Rate Mortgages: : This is an FHA loan, in which, the interest rate is adjustable or subject to change due to the various changes in the housing market.
FHA Energy Efficient Mortgages: FHA fully backs and supports the remodeling and improving of homes to make them more energy efficient and energy conservative.
Phoenix Mortgage Specialists, Inc. is proud to serve all our clients across Georgia and Alabama with premier FHA mortgage services specially tailored to their respective preferences and needs. It is our greatest pleasure to be a consistent source of professional guidance and expertise for every prospective homeowner and every individual preparing to walk through this milestone in his or her life. Contact us today! We would love to be of service to you in any way possible, and we would love to help answer any of your FHA loan-related questions or concerns.